Canara Bank to list Canara Robeco, Canara HSBC in Q2, Q3 after SEBI approval
This story was originally published at 18:47 IST on 24 July 2025
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--Canara Bank: See no issues in deposit mobilisation despite lower rates
--Canara Bank: See considerable lower deposit rates in Jul-Sept
--Canara Bank: See stress on NIM continuing rest of 2025, may improve in Q3, Q4
--Canara Bank: Confident that credit growth will be over 12% in Q2, Q3, Q4
--Canara Bank: Canara Robeco, Canara HSBC to list in FY26
--Canara Bank: Investing INR 8 bln in FY26 for digital transformation, svcs
--Canara Bank: Plan to make RAM portfolio entirely digital by end of FY26
--Canara Bank: Will list one subsidiary in Q2, one in Q3, based on SEBI nod
--Canara Bank: To raise INR 95 bln FY26, will time fund raise based on mkt
--Canara Bank: Do not have any immediate fund raising plans
MUMBAI – Canara Bank aims to list subsidiaries Canara Robeco Mutual Fund and Canara HSBC Life Insurance by the end of the financial year 2025-26 (Apr-Jun), K. Satyanarayana Raju, managing director and chief executive officer of the bank, told a post-earnings press conference Thursday. The bank aims to list one of the subsidiaries in the September quarter and the other in Oct-Dec. The order of listing will depend on approvals from the Securities and Exchange Board of India, Raju said.
"We already got the permissions from BSE and NSE (National Stock Exchange), only SEBI permission is required and it is at the end of that (process)," Raju said. "We can expect that in the next 15-20 days. Once we get that, one subsidiary will be listed in this quarter--the September quarter--likely in the last week of September. The second one may be in October. Which one is first depends on the permission we receive from SEBI."
Raju said the bank has no immediate need to raise funds because of the upcoming listing of its subsidiaries and its strong core capital. The bank's board of directors has approved raising INR 95.00 billion, of which INR 35.00 billion is through Additional Tier-1 bonds and INR 60.00 billion through Tier-II bonds, Raju said. The bank will raise these funds at the appropriate time depending on the availability of pricing, Raju said.
Credit growth is expected to be strong in the rest of FY26, Raju said. The chief executive said credit growth will be not less than 12% in the next three quarters. For this, the bank is aiming for 14-15% on-year growth in its retail, agriculture, and micro, small, and medium enterprises loan portfolio.
The bank intends to convert its entire retail, agriculture, and micro, small, and medium enterprises loan portfolio into a digital lending platform by Mar, Raju said. Shifting fresh loans and existing loan renewals to the digital platform would reduce operational expenditure and improving efficiency, he said. The bank is investing around INR 8.00 billion on latest technologies related to cyber security and on digitising its retail, agriculture, and micro, small, and medium enterprises loan portfolio.
Canara Bank said the high treasury income it reported for the June quarter was a one-time benefit because of a seasonal first-quarter trend and especially due to government bond sales from the bank's available-for-sale portfolio to the Reserve Bank of India at the central bank's open market operations through auction. The bank's treasury income for the quarter totalled INR 19.93 billion, nearly four times higher than INR 5.03 billion a year ago.
On the deposit front, Raju said rates could fall further in the September quarter as the transmission of the Reserve Bank of India's rate cuts would only be seen in new deposits, not existing ones. However, the cut in deposit rates is unlikely to hamper deposit mobilisation, he said.
"We were continuing at a higher rate of interest, but Jun. 9 onwards we reduced the deposit rate almost more than 50 basis points," Raju said. "Even then we are getting good deposits. We don't have any problem in deposit mobilisation."
Due to the lag in transmission of rate cuts to deposit rates, Raju expects stress in the bank's net interest margin in the Jul-Sept quarter. Margins are likely to rise from Oct-Dec, he said. However, all this is subject to the RBI's monetary policy and the upward move in margins could be delayed further if, as traders expect, the Monetary Policy Committee cuts the repo rate again in August or October, Raju said.
"So definitely this year some stress will continue on NIMs (net interest margins)," Raju said. "But it may not impact our bottom line because we are very active on our fee income, our treasury operations, our recoveries in return of accounts."
The public-sector bank Thursday posted a net profit of INR 47.52 billion for the June quarter, up nearly 22% on year. Thursday, shares of Canara Bank ended at INR 113.51 on the National Stock Exchange, up 5.3% from Wednesday's close. End
Reported by Cassandra Carvalho and Priyasmita Dutta
Edited by Rajeev Pai
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